Changes in Obtaining Government Commission Approval
Effective January 23, 2024, changes to the provisions governing the procedure for issuance of permits for certain transactions by the Government Commission for Control over Foreign Investments in the Russian Federation (the «Government Commission») came into effect. These changes were introduced by Resolution of the Government of the Russian Federation No. 40 dated January 22, 2024 and relate to the rules for issuing permits for the purpose of implementing additional temporary measures of an economic nature to ensure financial stability of the Russian Federation and other permits provided for by certain decrees of the President of the Russian Federation, as well as the exercise of other powers for the above purposes.
Changes in the procedure for issuing permits affect the entire list of transactions requiring the Government Commission approval.
Key changes
From January 23,2024, the relevant application to the Government Commission shall additionally include:
— a report on an independent appraisal of the market value of securities and shares in the authorized capitals of Russian companies that are the subject of the transaction, which must be performed by an appraiser accredited by the Government Commission;
— key performance indicators and their target values (if any) for acquirers of securities and shares in the authorized capitals of Russian companies and for Russian companies whose securities and shares in the authorized capitals are acquired as part of transactions, proposed as conditions for such transactions.
Exemptions
Notably, the new requirements do not apply to the following transactions:
— transactions between persons belonging to the same group of persons;
— transactions between persons related to foreign states committing unfriendly acts against the Russian Federation.
Conclusion
In light of these changes, it is imperative for stakeholders involved in transactions subject to the approval of the Governmental Commission for Control over Foreign Investments in the Russian Federation to familiarize themselves with the updated procedures. The Russin and Vecchi team stands ready to provide expert legal advice and assistance to mitigate the risks associated with carrying out Russia-related business transactions.
